:: actio-et-reactio ::
amg's market charts and blather
{{ This is a note to myself. Transcript of notes from 21-25 Feb. Please note it is password protected and not a public file. }}
Then why is it that a seat on the AMEX sold for 38% less than the last sale, and it was bought by the exchange owner? When the pro's are cashing in chips, it sure puts the bull-market-around-the-corner hype in perspective.
New York: An American Stock Exchange seat-holder agreed to sell his seat last week for $255,000, or 38 percent less than the previous sale, and that was only after the exchange's owner stepped in to buy it.
The National Association of Securities Dealers planned to buy the seat, said Robert Rendine, a spokesman for the Amex, using money for the first time from a fund set up to help stabilize seat prices when the NASD bought the exchange in 1998. The seller changed his mind and canceled the transaction, Rendine said.
Seat prices at the American exchange and the other three U.S. options markets have slid as the switch to trading in penny increments, the plunge in stock prices and increased competition have made options trading less profitable, traders said.
The NASD is "supporting seat prices because they are so low,'' said Paul Liang, managing partner of PBL Partners, which owns six Amex seats.[from Bloomberg]
Having rebounded smartly, price hit the 34d MA electric rail and was repelled just as smartly, with a gap down plunge moving it below even the 8d EMA.
This article poses a few thoughts participants in "chat sites" or "real" trading groups might want to consider from time to time.
If you are serious about improving your trading, be sure the bulk of your time is spent on your plan, on your trade, your success. If you find yourself being sidetracked, engaging in bickering, or simply wondering just what it is that you get from any particular group, a break to refocus your attention may be what is needed.
Trading on your own is a solitary activity. There is no boss but yourself, there are no employees to do the trench work. With attentive focus, your travels will cull resources to improve your methods. If fortunate, you will find gems both in techniques and in people willing to share their wisdom. Know when you have reached a dead end. Take care to keep your views fresh and constructive so that your strength isn't sapped by corrosive or slothful environments.
Be a prime number, which cannot be divided and diminished by the lowest common denominator.
RE McMaster's philosophy on money and investing is worth reading carefully. He gives us a stirring essay we can use to transform into actions to apply in our trading. His approach resonates with the idea of balance, actio et reactio.
One concept of note is that illness or dis-ease may be attributed to Three Ts: Trauma, Toxins, and Thought. Health is a natural state, but one that in the often corrosive "real world" must be cultivated continuously through right action. We not only shape ourselves in the present with what we do and "eat" physically and mentally, but we can also reshape ourselves, reconciling and healing traumas now "past", clearing the decks for present health. Fostering a non-toxic environment-- physical and mental-- contributes to our health bringing balance to our decisions. From that place of balance, we can pursue the more mechanical aspects of making money: systems, analysis, and risk management.
PS-- this is not a recommendation to Mr. McMaster's services. I have absolutely no affiliation with him.
What is curious about the "lime green" fork is its starting point-- it doesn't appeal to any sense of "balance" even tho' it does contain this jaggy price move. By balance I mean that partic. point is "just another low" and not a pivotal low.
Note that price has retreated back below the larger red Andrew Median Line, which also marks a retreat below 1857, the 50% balance point of the 1 Feb high to the 8 Feb low.
Whatever the "reason" thrown at it, bears are not winning this round. Swilling around in shorter time frames is known to be riskier, ie, more subject to volatility, and OE weeks amplify that effect. The AB=CD pattern has not panned precisely and as the updated 60m Andrews indicates, a breach of that Median Line suggests continuing strength.
PS - this is not a trading diary, but a forum for my ideas that I open to others. I may or may not take positions based on these observations. More importantly, my actions are tailored to my temperment and trading plan and discipline. Please, always do your own work, regardless of where you find an idea that sparks your interest.
Here is another view of the 60m Nasdaq Composite, showing an Andrews pitchfork overlay, which coincidentally caps the move at ~1862, the same target as the AB=CD shown earlier.
Those who studied or played the EWJ AB=CD flyer might consider looking at this potential bearish reversal set up in the making. In this case, there is a pleasant symmetry in between the current rally and the one from Jan30-31.
The validity of this play will be confirmed or squashed when the rally completes the move to the upper 34-period Bollinger Band, which I suspect may be tomorrow. There could be some overshoot. A consolidation could spell more up. However, should it reverse, the lower target is 1692, of course not in one feel swoop.
Yes, a flyer indeed. BTW, a similar pattern in the DJ30 and SPX, but fractional (ie, not a full 100% leg).
Here are the charts. The SPX/NYSE continues to outperform the NDX/COMPQ. This is best seen on the Andrews pitchfork studies. Notice that while all the indices bounced, the COMPQ is working within a steep down-fork while the SPX has bounced off the larger Median Line. At worst a consolidation or perhaps even a modest rise this week, which is also Options Expiration and likely to be volatile. I [still] do not believe ollie-ollie-all-in-free has been called!
We are at a Crossroads: the most important actio:reactio point of balance, the 50% price point of the September Rally. So many clues pointing here.
There is a significant COMPQ gap at 1746:1786. This is also the 50% fib of September rally at 1743.
The 1746:1786 gap was "the" measured gap move of the rally. Mentioned before that when COMPQ hit the 38% of the Sept rally, it began working off Sept gaps/fibs, which is a change from before (a few days ago) when it was still getting support from April gaps/fibs.
So, sitting near 50% of the September move should be a consolidating area. If (when) it breaks, it may come back to retest, but IMO, there is more correction ahead, just a matter of time.
By way of example, the April rally used the gap of 1923:2005 (which straddled th 50% retrace of 1973) repeatedly after May 22 high. It even used that zone in Sept rally (the so-called "gap echo".
Even tho' these are COMPQ #, the overlay with NDX is good. The COMPQ is IMO more amenable to gap and Fibonacci retrace analysis than the NDX. Because the COMPQ includes small caps, it is worth watching the NDX/COMPQ ratio. Today, the NDX closed at 1413.8, 2 pts above the 50% retrace.
the Gaps chart
One of the best examples of actio-reactio, balance, is the AB=CD pattern. In the chart below, the Japan iShares EWJ monthly chart, the leg AB is the first downdraft, which is geometrically equal in time and price to the CD leg, the second downdraft. This is further reflected in the reciprocal zig-zag relationship (ie, 1/0.941 ~ 1.068). This index is clearly approaching a buy.
uh oh... The superbowl indicator flashes Red
(for the record, Pats 20, Rams 17)
Just as we put the January Effect hoopla behind us, in rolls the Superbowl Indicator! ugh. It's failed the last 3 of 4 years, but for the record,
On one of the "Fox Business Block" shows this morning, a viewer asked if the market can be timed. Dagen-whats-her-name, the smug one, predictably said "No" and gave the usual There is no proof, it doesn't work story. On the other hand, Jonathan Hoeing pretty much scoffed at that idea and said that even if one were to set aside short-cycle timing, there are times when investors with long horizons if nothing else, should just stay out.
Here's a treat for you, again from Alan Newman at cross-currents.net. Newman makes an extremely convincing case for a Buy November/Sell April seasonality:
For more than a half century, one need only buy stocks on the last day of October and sell them the last of April to average a 15.5% return ex-dividends. On the other hand, Holding stocks from the first day of May to the last day of October has brought virtually no gain over the course of 51 years!!! Glassman notes, "The reason for the failure of market timing can be summed up in two words: 'random walk.' The phrase, made popular 30 years ago by Burton Malkiel, a Princeton economist, describes the pattern that stock prices take in the short term. It's random: You can't guess it; no one can." If the pattern shown in our picture below left is random, I will eat my website.
Alan Newman, editor of Crosscurrents, amplifies and refines how an analysis of Dollar Weighted Volume tells quite a different story than looking purely at share volume. Similarly, flight to safety (ie, rotation into "blue chip" stocks out of "OTC" stocks", has often preceded corrections in the Nasdaq. Excellent commentary from a truly fair and balanced analyst.
BTW, these same themes were recently presented here in the $Vol vs. Share Vol study (lower down on this page) as well as a watch of "flight to quality" on an ongoing basis in the ratio charts shown on page two of my stockcharts.com charts.
A number of people remarked that yesterday the DJ30 has traded above the Nikkei, a startling observation when one considers that at the height of the Nikkei, the Nikkei traded nearly 13x greater than the DJ30. It was the first time since August 6, 1957, that the Nikkei dipped numerically below the Dow. The ratio tells an interesting story.
It turns out that the recent plummet of that ratio to parity took 33 years-- the Nikkei first came close to overtaking the Dow in 1969, when both indices were trading close to 1,000 points. As it turned out, the Dow retreated before reaching 1,000, while the Nikkei didn't look back for another 20 years, when it hit its peak in1989. It has been 33 years since this ratio has been at parity.
|
moon phases |
At last, over the rim
of the waiting earth
the moon lifted with
slow majesty
till it swung clear of the horizon and rode off,
free of moorings
- Kenneth Grahame,
The Wind in the Willows
blather: nonsensical talk.
At times my analysis log, at times sharing what I've learned. Always my own work and views.
Content: amg
Basis: glish & bluerobot
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